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Gerald Celente "If Rates go up too High, the Economy goes Down, End of Story"

Interest-Rates / US Interest Rates Mar 13, 2018 - 03:38 AM GMT

By: MoneyMetals


Mike Gleason: It is my privilege now to welcome in Gerald Celente, publisher of the renowned Trends Journal. Mr. Celente is perhaps the most well-known trends forecaster in the world and it's always great to have him on with us.

Mr. Celente, thanks again for the time today and welcome back.

Gerald Celente: Oh, it's always great being on. Thank you.

Mike Gleason: Well, Gerald, it's never a dull moment in Washington, D.C., these days. President Trump always keeps it lively. We have the never-ending Russia controversy, of course, the war of words with North Korea, and the intervention in Syria have both been regulars in the headlines over the past year. Now Trump is talking about tariffs and people are worried about a trade war. Volatility is coming back to the stock markets and some investors are getting nervous about rising interest rates. When it comes to Russia interfering in U.S. elections, it seems more or less like a smoke screen. We have very little doubt there is plenty of collusion and a fair bit of it involved Hillary shepherding the Uranium One deal over the finish line.

So, we're finding it hard to predict which of these stories are worth paying attention to and which are likely to fade away. And there's nobody better who can help us evaluate this than you, so I'm excited to talk today. So, which of the current stories have legs, Gerald? Will there be a trade war, a big correction in stocks, another attempt by Democrats to impeach Trump? What?

Gerald Celente: Well, the attempt by the Democrats to impeach Trump have never stopped. And, again, Mike, I've been at this a lot of years, and anybody awake and alive that hasn't tuned out knows that every time we've had an election in this country, whether you like the person or not, they always used to say, "Well, whether you like it or not, this is the new person. Let's rally behind him and try to push the country forward." That never happened with Trump. And I want to make this really clear. I'm not a Trump supporter. I didn't vote in this last election. And (people say), "Oh, you didn't vote? Did you get what you deserve?", to which I say, "Grow up. If you voted for any of these people, then you got what you deserve and I don't deserve either of them. My standards are different."

And I look what's going on. It doesn't make the news, all the things that you just mentioned. Hey, how about what just happened in Italy with Cinque Stelle, the Five Star Movement, becoming the major party, a party that just started in 2009 because the people are disgusted with the establishment. How could you be disgusted with the establishment? You should love the establishment. How could you dare be anti-establishment? That's the stupidity of the language that they use.

They call it, for example, what Trump is doing, protectionist movements. Oh, a protectionist? Oh, I'm a close combat practitioner, have been for over a quarter of a century. I'll protect myself. I'll protect myself if I'm being attacked. But yet if you're being attacked trade-wise, economically, and you go to protect yourself, well, you're a protectionist. So, listen to the language, it's very important as a trend forecaster.

You mentioned about the Russian elections. The bar has sunk so low that people are listening to Samantha Power, the former UN Ambassador. And I'm tired of hearing this baloney, "Oh, if only women were in charge." It's not about men, women, race, creed or color. Good and bad comes in all of them. Let's call it equal. This is a woman, along with Hillary Clinton, Samantha Power and Susan Rice that started the Libyan War, that overthrew a sovereign nation, whether you liked the guy or not, that did nothing to us and created the refugee problem that nobody talks about and the migrant crisis. Because when Qaddafi was in there in Libya, they weren't going into Europe. He made a deal with them and warned them that when he went, the migrants would come.

Going back to Samantha Power, they quote this warmongering woman who loved every war that she's ever known beginning with Bill Clinton's destruction of Yugoslav War, she's quoted in the Spanish newspaper, El País, regarding the election that just happened in Italy, "Italy joins long list of elections influenced by Russia. Sputnik will do Sputnik does," of course, that's the media station, "The question is what are our democracies going to do about it? Will voters repudiate candidates who seek to benefit from Russian interference?" Only a stupid moron, an ignorant jerk, would say those words and only low life presstitutes that put out, because they get paid to put out, would repeat those words and that's what the media has become. So, if anybody is tuning in to the mainstream media to get their news, you better grow up.

And the same thing's happening with the equity markets. Look what happened. Oh, the markets are down. Yeah, so? Why did they go down? Well, listen to why they went down. Ah, because that guy Gary Cohen's not in there, I tells you, and he was the chief economic advisor and he's against Trump's trade policies and tariffs. Just hours before that, the same blabbermouths on the business media were trumpeting that the market went up 150 points because North Korea is talking peace. North Korea talking peace has nothing to do with anything. It has nothing to do with price-earnings ratios. It has nothing to do with GDP. Oh, yeah, if they're going to blow the joint up, of course, then the whole world has to worry, but that's not going to move a market. So, the markets are moving because of one major issue and that's interest rates. And they’re concerned that they're going to raise interest rates too fast.

And, look what happened, hey, home sales are down. Pending home sales are down. New home sales are down. New car sales are down. Oh, consumer debt, oh, it's over, what, 13.1 trillion dollars? Oh, what's the national debt? Over 20 trillion dollars? And you just added another 1.5 to it? What's the global debt? Eh, almost 50 trillion dollars. What happens when interest rates go up? That's what's driving the markets. They're over-leveraged, they're overvalued and they're fearing interest rates rises. So, if anybody's listening to the major media to get their news, you better grow up because all you're getting is identity news. Whatever station you're turning into, they're selling the propaganda that they love most.

Mike Gleason: I want to key in on something that you just mentioned there. We have such a consumption-based economy and it appears like buying of the big-ticket items like homes and automobiles, as you just mentioned, is slowing, likely based on rising interest rate fears and the fact that all of those Americans in debt are starting to feel these rate hikes. What do you have to say on the consumer front here, Gerald, and what might that mean for the economy?

Gerald Celente: If rates go up too high, the economy goes down, end of story. And, again, the only reason the markets are going to sustain themselves is because of stock buybacks. And Trump's tax plan, again, I call it what it is, why would anybody want to have major deficits the way that you have? If you're in business and you're losing, what, 500 billion dollars a year, are you going to stay in business? So, going back to Trump's plan, I agree with him on redoing these trade agreements.

When Bill Clinton, Slick Willie, "I didn't have sex with that woman Monica Lewinsky. I smoked it and didn't inhale," Clinton brought us NAFTA, he promised 200,000 jobs. We lost almost 900,000. When Bill Clinton got China into the World Trade Organization and Bush signed them in two weeks after 9/11 when no one was watching, we lost 3.5 million jobs to China. So, that's why I'm saying I agree with Trump. And, by the way, Obama's South Korean deal, we lost 75,000 jobs on that. Going back, on the tax thing. No, I don't agree at all.

And don't believe me, look at the Tax Policy Center and others that have done nonpartisan groups, the 1% get 83% of the tax breaks going back to the market. They're allowing corporations to repay to create money overseas and paying very little on taxes and the tax breaks going down from 35 to 21% are allowing them to invest more in: stock buybacks. It's not going into capital improvements. It's not going into wages. Because you look at the facts. What, the last quarter, the S&P 500 earnings, are up 15%. They're looking for a 19% increase in 2018. The money didn't go into capital improvements. It went into stock buybacks. Since Trump passed the tax plan, over 200 billion dollars have gone into stock buybacks. They're estimating, Mike, that there's going to be 1.5 trillion dollars’ worth of stock buybacks this year. That's driving the market.

And then you look at the numbers. It would be, depending on whose numbers you look at, between 85 and 90% of all of the stocks in the United States are owned by 10% of the people. The 1% owns 45% of that. And, on average, that 10% owns about $350,000 of stocks. So, now the rest of the stocks that's owned, the 10% left out there, that we, the little people own, only own about $15,000 worth of shares. So, the market is very different than the real economy. The Trump rally has peaked. It may go a little higher. It's peaked. And so what we're saying is the downside risk is definitely ... it hit a correction and pulled out of it, 10% down in mid-February. We could see another correction and a possible bear market because of the blowback from trade agreements. And we believe that the aluminum and the steel issue that really only affects mostly Canada the most, it doesn't touch China, they're doing this to renegotiate NAFTA. And so they're going to say, "Look, we'll get rid of these tariffs if we renegotiate this lousy deal."

Oh, and going back to Slick Willie Clinton, perfect name for him. Another lying little freak. Line him up with the rest of them, Bush, Clinton, Obama. You name them, they're all there. Anyway, he also promised not only that jobs would be created and that our trade deficit would improve, we went to basically a two billion dollar trade surplus to now 71 billion dollar deficit with Mexico. How could anybody support this stupidity? The only way you support the stupidity, if you're on ABC, NBC, CBS, CNN, Bloomberg, CNBC, and you're getting paid to put out. You're a presstitute. Because anybody with an ounce of brains would say, "This doesn't make any sense. We lost all these good jobs."

Oh, Al Gore, I remember that fat mouth shooting his mouth off with the Ross Perot debate when Ross Perot warned about the sucking sound coming out of this country as the jobs left. And Al Gore, another little boy who never worked a day in his life, born on third base, thought he hit a home run. His old man was a senator… that's why he got where he was… saying that, "Well, we're going to get rid of those lousy, dirty manufacturing jobs and bring you service sector jobs." Yeah, that pay nothing. So, now you hear the stupid people in the media say that, "Well, the prices will go up on things." Oh, yeah, what a half a penny on a can of beer? And you're talking about that? Oh, but how about if manufacturing jobs came back and the Rust Belt got rid of the rust and people are making a living wage? Wouldn't they be happy to pay a little more if they're living a lot better?

So, here's what I say to everybody. Is the world, is your society, is your country better off with globalization and trade agreements and the Euro Zone than it was before any of that? And if you could add to five, if it's only one hand you have to count on, you could count on the fact that median household income in the United States is below 1999 levels. You can see the debt levels of the people. And look at the facts, 78% of the people are living paycheck to paycheck. So, the markets are very disconnected to the real world and that's our forecast on the markets.

Mike Gleason: Expanding the point a bit here, stocks have been on shaky ground recently. What do you make of the reaction in gold over the past couple of months? It got taken down last month when we had a bit of a big correction there over the few days that we did, but now it seems to be hanging in there quite well during the latest couple of stock market down days. So, what do you make of gold as a safe haven here, Gerald?

Gerald Celente: We've been saying this now since 2014. Gold has to smartly break over $1,450 an ounce and then, after that, it does a Bitcoin bounce, meaning it'll skyrocket up over $2,000 an ounce. Gold has not been able to break past our point, which we're calling $1,385 an ounce. It has to do that. But the downside risk of gold, again, we do not give financial advice… we're trend forecasters. Our downside risk of gold is very small. And so we're looking at a downside risk of tops 100 bucks and we don't see that happening. But we're saying to our subscribers to the Trends Journal and our clients, watch the price of gold. If gold starts moving up sharply, watch out for a market crash because the markets are over-leveraged, they're overvalued. Again, the price-earnings ratios now are near historic highs. Everybody knows about the ETFs and the over-leverage, so follow gold. Gold is singing its own song and, right now, it should be going up more than it is if the markets were truly in trouble. That's our forecast for gold. And, again, we still maintain that gold is the ultimate safe haven.

Mike Gleason: Well, now as we begin to close here, is there anything else you're focusing on as we progress through the year? Anything that you're keeping an eye on that we maybe haven't discussed that you think need to be on people's radars, Gerald?

Gerald Celente: Yes, you mentioned Syria briefly, and that's what you have to really watch out for. You have a problem going on over there in Israel where Netanyahu is being brought up on corruption charges. And one of my sayings is "When all else fails, they take you to war." And that's what we're concerned about. The war talk against Iran is heating up in the United States. It's heating up in the Middle East. If the United States, Israel, Saudi Arabia, and their Gulf allies go to war with Iran, kiss the markets goodbye and a lot of life with it. And that, of course, will be really spiking gold prices. And it'll also spike oil prices.

And, right now, again, I'm going through the facts... the United States cannot take higher interest rates. The consumers are already stretched out. You're looking, again, at the facts where banks are reporting that late payments are growing again. So, they cannot take a raise in rates, nor can they take a raise in oil prices. That'll really put a damper on the economy. Watch out what's going on in the Middle East and take your identity out of it. It's not what you like, who you're rooting for or what you believe in, just look at the facts and follow them. If you go to a doctor and you want a diagnosis, all you want are the facts. You don't care what religion, race, creed or color the doctor is or what the doctor believes in. All you want is an honest diagnosis of the facts and that's what people need to do. And, of course, that's what we try to do our best with the Trends Journal.

Mike Gleason: Well, you are doing a fantastic job there. I love following you like I do. It's wonderful stuff and appreciate you coming on and for your time today. Now before we let you go, please tell listeners how they can get their hands on Trends Journal and the other great information there that you put out on a regular basis at the Trends Research Institute through the various mediums so they can get history before it happens, as you like to say.

Gerald Celente: Go to and you'll see our Trends Journal, Trend Alerts. We do Trends Monthly. Trends in the News broadcasts Monday through Thursday and Trend Alerts each week. And we really do our best to keep people ahead of the news and on top of the trends. And it's only $99 a year, money back guarantee. You have nothing to lose.

Mike Gleason: Well, thanks again, Mr. Celente. We always love having you on. Stay warm and dry up there. I know your part of the country is getting some pretty good storms this week, but hope you have a great weekend and I look forward to our next conversation. Take care.

Gerald Celente: Well, thank you. And thank you so much for having me and thank you for all that you do.

Mike Gleason: Well, that will do it for this week. Our sincere thanks, again, to Gerald Celente, publisher of the renowned Trends Journal. For more information, the website is Be sure to check that out.

Check back next Friday for our next Weekly Market Wrap Podcast. Until then, this has been Mike Gleason with Money Metals Exchange. Thanks for listening and have a great weekend everybody.

By Mike Gleason

Mike Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2018 Mike Gleason - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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